Whenever I go to the houses of parliament these days, I make sure that I leave my penknife behind, because it is bound to be seized by the security people. But until last week, when I was on the way to hear the celebrated American economist Paul Krugman and others debate the wisdom of current austerity policies, I had not realised that the ban on potentially offensive weapons also applies to small padlocks of the sort one uses to safeguard one's clothes in the lockers of changing rooms.

When I inquired as to why they were seizing my padlock, I was told that it was for fear that one might chain oneself to the railings. When I replied that this was not my intention – and, anyway, that it was perfectly obvious that I was not in possession of a chain – the answer was that that was the policy.

When I told this story to my old friend and colleague Adam Raphael, now joint editor of the Good Hotel Guide, he wickedly suggested that perhaps the powers that be were worried that protesters would take a leaf of out the book of the suffragettes of old, and chain themselves to the railings in protest against George Osborne's austerity programme.

At all events, the security people were perfectly polite, and I proceeded to committee room 14 for the debate between Professor Krugman and Jonathan Portes (director of the National Institute of Economic and Social Research) on the one hand, and Stephen King and Bridget Rosewell, respectively group chief economist at HSBC and chair of the consultancy Volterra Partners, on the other.

But before we go into the debate, let us dwell briefly on the background.

As the Office for Budgetary Responsibility and the governor of the Bank of England have recently reminded us, the present depression is not the consequence of the government's austerity programme. The objection to Osborne's austerity policy – a position shared by Krugman, Portes, your correspondent and many others – is that it is the austerity programme that is keeping the economy depressed, the depression having been caused principally by the financial crisis but aggravated by the impact of much higher prices for oil and other commodities in recent years.

Moreover, in the case of the British economy, there is the added erosion of purchasing power as a result of the devaluation of the pound, while the general world crisis has limited the extent to which British exporters could take advantage of the improvement in price competitiveness provided by the devaluation.

Now, the position of King and Rosewell is essentially that, in the absence of the deficit reduction programme, the financial markets would lose confidence in Britain and interest rates on government debt would rise sharply. The inference is that it is only because the chancellor is cutting the deficit, or trying to, at a time of depression that interest rates are not much higher. The corollary is that such a rise in interest rates would not only aggravate the cost of servicing the national debt, but would also inhibit a recovery.

By contrast, Krugman and Portes argue that it is the depression that keeps interest rates low. Krugman and another ally, Professor Richard Layard of the London School of Economics, wrote in an accompanying paper: "Despite exceptionally high deficits, interest rates today are unprecedentedly low in all major countries where there is a normally functioning central bank … [and] the central bank can always, if needed, fund the deficit, leaving the bond market unaffected."

King and Rosewell try to scare us with the point that "taking public and private debt together", debt in the UK is 250% of GDP. Of this, the public sector component is 80%.

Frankly, this is not especially high by historical standards. And, as Krugman and Layard point out, "the conditions for crisis were created by excessive private sector borrowing and lending, including by over-leveraged banks. The collapse of this bubble led to massive falls in output and thus in tax revenue. So the large government deficits we see today are a consequence of the crisis, not its cause." (My italics.)

Thus to add the public and private sector figures together is pushing things a bit, because the rise in the public sector debt has been necessary to offset the deleterious effects of the financial crisis.

Now, as Krugman says, "I am all in favour of cutting deficits eventually". But the crisis of deleveraging means that those in the private sector with excessive debts are cutting back – and so, in the atmosphere of panic-driven austerity, are the people who don't have excessive debts. "The tragedy is that each player is trying to do what makes sense, but this is collectively disastrous. This is why we have governments: to serve as a stabilising force."

To balance the economy – which, at times like this, takes priority over balancing the budget – governments, as Krugman says, "must spend more when the private sector spends less". At the very least, they should not join in the cutbacks.

After all, most of us value our freedom, and don't want to have to chain ourselves to the parliamentary railings in protest against the austerity programme.